STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, DIVISION OF REAL ) ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 88-2547

)

JEFFREY ROBERT HORNE, )

)

Respondent. )

)

RECOMMENDED ORDER

A formal hearing in this case was held in Melbourne, Florida on September 6, 1988, before Mary Clark, Hearing Officer, Division of Administrative Hearings.

The parties were represented as follows:

For Petitioner: Steven W. Johnson, Esquire

Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

For Respondent: George B. Turner, Esquire

Gateway Business Center 1333 Gateway Drive

Melbourne, Florida 32901-2623 BACKGROUND AND PROCEDURAL MATTERS

Petitioner's Administrative Complaint, dated March 23, 1988, alleges three counts of violations of Chapter 475, Florida Statutes, related to certain real estate activities by Respondent.

Respondent's answer admits some material facts alleged in the complaint and admits one violation. The remaining two violations are denied, and affirmative defenses are presented. At the hearing the agency presented the testimony of John F. Baer, Jr., Peter S. Tarbell and (by deposition) Rhoda Swiger. Jeffrey Horne testified in his own behalf. Five exhibits were admitted by stipulation, including the licensing file, Ms. Swiger's deposition, a composite of eleven contracts for sale and purchase, a copy of a deposit check, and a composite of two affidavits executed by Jeffrey Horne.

No transcript was prepared, but Petitioner submitted a post-hearing proposed recommended order and Respondent submitted a "final argument brief." The findings of fact proposed by Petitioner are substantially adopted in this Recommended Order.

ISSUES

The Administrative Complaint alleges the following:

Count I alleges that Respondent is guilty of fraud, misrepresentation, concealment, and the like, in violation of Section 475.25(1)(b), Florida Statutes, by failing to notify a seller's agent that the earnest money deposit he received was a check with contingencies on its face preventing its deposit in a trust account.

Count II alleges that Respondent is guilty as a salesman of violating Section 475.256(1)(k), Florida Statutes, by failing to place with his employer a deposit check entrusted to him.

Count III, admitted to by Respondent, alleges that he violated Sections 475.42(1)(b), Florida Statutes, and 475.25(1)(a), Florida Statutes, by acting as a broker while licensed as a salesman, or by operating as a salesman for a person not registered as his employer.

The issues are whether these violations occurred and, if so, what discipline is appropriate.

FINDINGS OF FACT

1. In 1986 and 1987, at all times relevant to the complaint, Jeffrey Robert Horne was licensed as a Florida Real Estate salesman, holding license number 0433763. At that time he was employed by Realtyline, Inc., Post Office Box 800, Sebastian, Florida 32958.

   
   

2. Jeffrey Horne is currently licensed as a real estate broker, c/o The Peoples Realty, Inc., 951-C Fellsmere Highway, Sebastian, Florida 32958.

   
   

3. On June 6, 1987, Jeffrey Horne, while employed at Realtyline, Inc., obtained from John F. Baer, Jr., as trustee for Colonial Realty Trust, eleven written offers to purchase eleven lots in an unrecorded subdivision in Brevard County. The lots had various owners, although the owner of one of the lots was unknown at the time.

   
   

4. On that same date John F. Baer gave Jeffrey Horne a check in the amount of $5,000, payable to "Realtyline c/o Jeff Horne," representing a $500 earnest money deposit for each of the lots. The face of the check bears this lengthy notation:

   
   

   This check to be held by Jeff Horne pending notification that all contingencies have been satisfied on Parker Rd. offers. At that time it will be replaced with a check for 2500 for each contract negotiated and then deposited to escrow.

   (Petitioner's Exhibit 4)

   
   

5. The contingencies, described in an addendum to the contracts, included the provisions that all eleven contracts be accepted for the same offer and that certain permits and local development approvals be obtained.

6. At the hearing, John Baer explained that he wanted the check held by Jeffrey Horne because he had been dealing with Horne on the property. He knew that the realty company was in transition and did not want the deposit stuck in an escrow account if the firm "went under." Furthermore, he had operated in this manner in the past with other firms.

   
   

7. Peter S. Tarbell was the qualifying broker for Realtyline, Inc. During this time Jeffrey Horne was attempting to get a partner and purchase the company from Tarbell. The negotiations were acrimonious and both men were dealing through attorneys.

   
   

8. Tarbell was aware of the Baer offers on June 6, 1987, and read one of the contracts with the addendum. He vehemently denies that he was aware of the deposit check with its restrictions. Horne just as strongly insists that he told Tarbell about the check.

   
   

   It is uncontroverted, however, that Tarbell instructed Horne to hold on to the contracts until he got the deposit money.

   
   

   Horne went back to Baer and asked to have the restrictions removed from the check. Baer refused and told him to get the contracts changed to reflect the restrictions on the check.

   
   

   The contracts, as executed, provided for $500 deposit each, to be held in escrow by Realtyline, Inc. On six of the contracts Jeffrey Horne signed as escrow agent, under the following preprinted statement: "Deposits under 1.(a) received. (If check, subject to clearance.)"

   
   

9. Rhoda Swiger, a broker with Atha and Swiger Real Estate, Inc., had the listing to sell the lots. When Baer was in Horne's office executing the contracts, Horne called her to find out if there were prior offers on the lots. Horne told her that Baer was getting ready to make his offer.

   
   

10. Horne became nervous holding the contracts. He knew that Rhoda Swiger was expecting them but he also knew that Tarbell had told him to hold them. He could not get another deposit from Baer. He admits that he committed an error in judgment, but contrary to Tarbell's instructions, he took six of the contracts to Rhoda Swiger after they had been in his desk drawer for several days. He told her he had the deposit check but did not tell her about the restrictions on the check.

    
    

11. Sometime later Rhoda Swiger called Realtyline to say that the offers were accepted. Tarbell took the call and found out that Horne had released some of the contracts against his wishes.

    
    

    Tarbell obtained the check and remainder of the contracts from Horne and terminated his employment.

    
    

    In Baer's words, the deal then "fizzled."

    
    

12. The record does not disclose any past violations by this licensee, either as a salesman or a broker. He cooperated fully with the investigation and readily admitted, in his affidavits and at the hearing, his participation in the events which led to this proceeding.

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction in this matter, pursuant to Section 120.57(1), Florida Statutes, and Section 455.225(4), Florida Statutes.

    
    

14. Section 475.25(1), Florida Statutes, provides that the Florida Real Estate Commission may discipline a real estate license if it finds that the licensee:

    
    

    1. Has violated any provision of s. 475.42 or of s. 455.227(1).

       
       

    2. Has been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction in this state or any other state, nation, or territory; has violated a duty imposed upon him by law or by the terms of a listing contract, written, oral, express, or implied, in a real estate transaction; has aided, assisted, or conspired with any other person engaged in any such misconduct and in furtherance thereof; or has formed an intent, design, or scheme to engage in any such misconduct and committed an overt act in furtherance of such intent, design, or scheme. It is immaterial to the guilt of the licensee that the victim or intended victim of the misconduct has sustained no damage or loss; that the damage or loss has been settled and paid after discovery of the misconduct; or that such Victim or intended victim was a customer or a person in confidential relation with the licensee or was an identified member of the general public.

       * * *

       (k) ... has failed, if a salesman, to immediately place with his registered employer any money, fund, deposit, check, or draft entrusted to him by any person dealing with him as agent of his registered employer.

       * * *

       
       

       Section 475.42(1)(b), Florida Statutes, provides:

       
       

       (b) No person licensed as a salesman shall operate as a broker or operate as a salesman for any person not registered as his employer.

       
       

15. In addition to his admission of a violation of Section 475.42(1)(b), Florida Statutes, Jeffrey Horne admits that he neglected to tell Rhoda Swiger about the restrictions on the check when he delivered the contracts with terms

    plainly indicating that he had received the deposits as escrow agent. He also admits that he did not immediately deliver the check to his employer.

    
    

    These omissions constitute violations of Section 475.25(1)(b) and (k), Florida Statutes, as alleged in the administrative complaint.

    
    

16. The disciplinary guidelines of the Commission are found in Rule 21V- 24.001, Florida Administrative Code. These provide for a minimum penalty of a reprimand and/or a fine of up to $1,000 per count. The maximum penalty for violation of Section 475.25(1)(a), Florida Statutes, is one year suspension; for violation of Section 475.25(1)(b), Florida Statutes, the maximum penalty is revocation; and for a violation of Section 475.25(1)(k), Florida Statutes, the maximum is six months suspension.

RECOMMENDATION

Based on the foregoing, it is hereby

RECOMMEND that a final order be entered finding Jeffrey Robert Horne guilty of violations of Subsections 475.25(1)(a), (b) and (k); that he be reprimanded and fined $500 per count, for a total of $1,500.

DONE AND RECOMMENDED this 20th day of October, 1988, in Tallahassee, Leon County, Florida.

MARY CLARK

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 20th day of October, 1988.

COPIES FURNISHED:

Steven W. Johnson, Esquire Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

George B. Turner, Esquire Gateway Business Center 1333 Gateway Drive

Suite 1025

Melbourne, Florida 32801-2623

Darlene F. Keller Executive Director Division of Real Estate

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

Bruce D. Lamb, Esquire General Counsel

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Docket for Case No: 88-002547

Orders for Case No: 88-002547